With health insurance premiums rising every year, individuals should buy a cover for an extended term —three to five years —to protect against medical inflation. For youngsters, it is especially helpful as they can secure affordable premiums for multiple years and avoid potential hikes as they age.
In a multi-year policy, there is no hassle with annual renewals. Policyholders can choose to pay the premium in EMIs for a multi-year policy, and it won’t impact the discounts they receive. This option provides flexibility with payments, easier to fit into their budget while still allowing them to enjoy the cost savings of a multi-year plan.
Locking a fixed premium
By locking in a stable premium rate over an extended period, policyholders gain greater financial predictability. This allows them to plan and budget for their healthcare costs without the stress of unpredictable annual hikes.
Siddharth Singhal, head, Health Insurance, Policybazaar, says multi-year health insurance policy is useful for youngsters as they face fewer health risks and paying upfront at a fixed rate can lead to significant savings. “It is also worth noting that multi-year health plans offer discounts up to 17-18%, which makes these policies even more cost-effective.”
Rakesh Goyal, director, Probus, an insurance broking firm, says in recent years, health insurance premiums have risen significantly, making coverage increasingly unaffordable for many.
“A multi-year policy avoids the hassle of renewing the policy each year and safeguards a policyholder from future premium increases, offering long-term stability and peace of mind.”
What to consider
Individuals must assess their budget to determine if they can afford the lump-sum payment or need to opt for an EMI. They should also ensure that the policy offers adequate coverage, including critical illnesses, hospital cash benefits, and day-care procedures. While premiums may be fixed for the term of the policy, some insurers may still adjust premiums after the policy term ends. It is important to understand how premiums may change after the multi-year term expires.
Individuals must review what the policy covers, including hospitalisations, outpatient treatments, specialist consultations, preventive care, maternity benefits, and other health-related expenses. One should also ensure that the plan provides comprehensive coverage that aligns with the policyholders healthcare needs. Also, look for insurers with a reputation for quick, transparent, and hassle-free claims settlement.
Opt for OPD add-on
Individuals must confirm whether the policy allows them to add riders or top-up benefits during the tenure. If the policy allows, they should opt for OPD add-on to cover costs for routine doctor consultations and cost for diagnostics and medicines. They should also consider a consumables cover that can cover the costs for non-medical expenses during a hospitalisation such as gloves, masks, and other medical disposables, which can otherwise add up.
No-claim bonus
A no-claim bonus (NCB) in a multi-year plan works the same way as in annual policies. Most insurers offer an increment to the sum insured if no claims are made during the policy year. In a multi-year plan, this accrued NCB accumulates yearly within the same policy tenure, increasing the insured amount.
Pankaj Nawani, CEO, CarePal Secure, says in the case of multi-year plans, the NCB can be accumulated year over year, boosting the overall coverage amount. “This is particularly beneficial for young policyholders who might not require frequent medical care. They can gradually build a higher coverage amount over the policy duration, offering better protection against future health expenses,” he says.